Binance CEO Changpeng Zhao recently said that the crypto-currency industry may shift to stable currencies other than the dollar following the current BUSD drama. According to Changpeng Zhao, the crypto ecosystem could start using stable currencies linked to the euro, Singapore dollar or yen. This would reduce the reliance on US dollar-based tokens.
S’speaking yesterday at’a Twitter Spaces eventChangpeng Zhao said:
“I think that, given the current pressure and the current positions taken by regulators on stable coins based on the U.S. dollar, I think that, as you said, the industry will probably move away from stable coins not based on the U.S. dollar […] as a result of that, we will probably see more stable coins based on the’euro or other Japanese yen, the Singapore dollar, so that has actually prompted us to look for more’options in different places.”
The Binance CEO also addressed the issue of the crypto industry deploying gold as a standard of value instead of the U.S. greenback. While he admitted that the use of gold “makes sense“, Changpeng Zhao explained that “most people’s costs are still in fiat currency.“Therefore, since most returns on investment are based on dollars, stable currencies backed by the U.S. dollar are essential.
The Binance CEO believes that algorithmic stable currencies could also play a more important role, alongside non-dollar stable currencies, in the future. However, Changpeng Zhao also warned that these stablecoins backed by the U.S. dollar would have inherent risks that stablecoins backed by fiat currencies do not. Therefore, Changpeng Zhao believes that users need to be aware of these risks so that they can “make very clear decisions about what is going on” with regard to the use of stablecoins.
Binance CEO’s statement on “ stable non-dollar coins “follows the SEC’s recent criticism of BUSD.
Changpeng Zhao’s statements follow the legal tussle between the Securities and Exchange Commission (SEC) and blockchain company Paxos. According to the US regulator, Paxos violated investor protection rights by issuing unregistered securities in BUSD. The SEC issued a notice of intent to sue against the stablecoin issuer and implored Paxos to cease further issuance of BUSD.
Although Paxos has not yet responded to the SEC’s allegations, a Binance spokesperson attempted to clarify the situation at the time. According to the spokesperson, Binance licenses its trademark to Paxos, which owns and issues the product. In addition, the Binance representative added that Paxos is under the regulation of the New York Department of Financial Services (NYDFS). The spokesperson also said that the exchange would continually monitor the situation between the SEC and Paxos before adding:
“Stable currencies are a critical safety net for investors seeking protection from market volatility and limiting their access would directly harm millions of people around the world.”
At the time, Changpeng Zhao also explained that the Paxos funds were safe and fully covered by ratified bank reserves. The Binance CEO also said that the NYDFS ordered Paxos to desist from minting BUSD tokens amidst the SEC’s allegations. However, he also expressed his continued support for BUSD.”for the foreseeable future“. Changpeng Zhao also said that customers can expect necessary adjustments to the product as users eventually migrate to other stable currencies.
Changpeng Zhao believed that the SEC investigation into BUSD has triggered the crypto industry and would lead to the coin’s decline over time.